What does NEC4 clause 60.1(6) mean?
It makes it a compensation event when you get no reply to a communication within the period the contract gives for that reply.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
In the NEC4 main contract the late reply is from the Project Manager or the Supervisor. On an NEC subcontract it is from your main contractor. The contract requires replies to many communications. The period is either the general period for reply in the Contract Data, or a specific period a clause gives. One example in the main contract is the 2 weeks the Project Manager has under clause 62.3 to reply to a quotation. The clause is about a reply that is late or missing, not one you dislike. A reply on time that refuses acceptance falls, if anywhere, under clause 60.1(9). To rely on this clause, show the communication you sent, and that the contract required a reply to it. Then show the period that applied, when it ended, and that no reply had come by then. Notify under clause 61.3 within 8 weeks of becoming aware. That is the day after the reply period ended, not the day the late reply arrives. Some late replies have their own fix, such as a quotation being treated as accepted under clause 62.6 once you notify the failure. This compensation event covers the cost those fixes do not. The change to the Prices, your contract price, is assessed under clause 63.1. It is the effect of the late reply on actual Defined Cost up to the notification and forecast Defined Cost after it, plus the Fee. In practice that is the cost of work held up while you waited. Two things go wrong most. You cannot show when your communication was received. Or the cost claimed arose before the period ended, and would have arisen anyway. Any delay to the Completion Date is assessed separately under clause 63, and that is a job for your planner.
Example
Illustrative example. The scenario and figures are invented.
The facts
A cladding subcontractor sends its bracket design to the main contractor for acceptance. The contract requires a reply within the period for reply in the Contract Data. The period ends, and the reply arrives 16 days late.
What happens
- The subcontractor cannot release the brackets for fabrication until the design is accepted. The fabricator's slot is lost, and the brackets are made in a later, dearer batch with a premium delivery.
- The subcontractor notifies the event under clause 61.3 the day after the reply period ended, and gives an early warning of the fabrication effect at the same time.
- The quotation assesses the extra fabrication and delivery Defined Cost the late reply caused at £7,900, under clause 63.1.
- With a fee percentage of 9 per cent, a Fee of £711 is added, so the proposed change to the Prices is £8,611.
The quotation
| Item | Amount |
|---|---|
| Additional fabrication and delivery Defined Cost | £7,900 |
| Fee at 9 per cent | £711 |
| Proposed change to the Prices | £8,611 |
The outcome
The proposed change to the Prices is £8,611, built from the Defined Cost the late reply caused plus the Fee. Any effect on the Completion Date is shown on the programme.
To have every reply period diarised, so a missing reply is noticed and notified, see our Compensation Event Loss Prevention service.